If they did a microdrama about your life, what would it be called?
Okay.
Hi everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher.
Scott, we're here in California, the hellscape behind us. It's really quite...
It's awful here. I don't know how people survive this dry weather, the breeze, the ocean, the In-N-Out Burger.
Yeah. So, we're here at a conference. We're recording this live in front of a live audience at CAO Summit in Los Angeles. This is the Terranea where again I used to run the Code Conference here for many, many years and many memories. There really are a lot of memories here of doing things.
Yeah, this is... Yeah, you're absolutely... This is kind of where you... This is where you made Mark Zuckerberg sweat. It's spectacular on it.
He sweat because he had a panic attack.
Yeah, no, I think you pressed him.
Real memory for me is this is actually the last interview that Steve Jobs ever did. He did several interviews here, but the last one before he died was here, which was really an amazing interview. It was actually just in this ballroom here. And one of the things that I remember before that when we did Gates and Jobs together is when we had Mark here the year he sweat. All he wanted to do, he was an up-and-coming entrepreneur. Facebook wasn't very big. And all he wanted to do was meet Steve Jobs, like kind of like a fanboy, which was really something else. So, I introduced them, which was kind of a moment. It was actually literally right down on this lawn right here. So, this place is full of memories. So, what have you been doing this week, Scott? You just became a regent of the University of California.
Yeah, and thank you. In other news, Joe Rogan has been appointed to head of the CDC.
Yeah.
Did you... Let me be honest, when you saw this morning, did you think it was The Onion?
I did. I did. I didn't think it was real. I was like, what is Gavin up to? Like, what was happening? And they also called you the left-wing Joe Rogan.
Yeah.
In the story in the New York Post.
Graduates of the University of California do we have here? So, I don't like to talk about myself, but I will for just a moment here. So everyone, when you get to a certain age, you want to be on important boards. You want to be on organizations that are innovators. I would argue that the University of California is the greatest innovation machine in history. We have 75 Nobel Prizes, four of five last year, 300,000 students, 200,000 faculty, 7,500 PhDs, more startups creating more value than any nation in history with the exception of the US and China, and consistently punching out, giving unremarkable people remarkable opportunities. And just a flashback to when I applied to UCLA Berkeley, admissions rate when I applied was 74% to UCLA. And I was one of the 26% that didn't get in.
Installing shelving, came home, my mom said, let's appeal. And I remember when they called me and said, you're not qualified, but you're a native son of California, we're going to let you in. And then I rewarded them with a 2.27 GPA, true story from UCLA. And this is how...
It's not easy to do, to get a 2.27.
Would you not go to classes?
No, I learned every line from Planet of the Apes and how to make bongs out of household items.
And then this is how different the University of California was back then. I got into Berkeley's Haas School of Business with a 2.27 GPA. And then quite frankly, like a lot of men who have an immature prefrontal cortex, I got my act together. And so, just a virtue signal, my sole mission is accessibility and figuring out a way that we can let in more unremarkable kids that might get to do remarkable things. Anyways, that's my story. I'm sticking with it.
I'm still stuck with 2.27. Is that like a D?
A lot of... I had nine F's. So, I got a job at Morgan Stanley because I lied about my grades. But I wasn't going to be able to graduate because I couldn't pass calculus. I failed it twice and I was failing it, and if you fail something the third time at UC, you're not allowed to take the class again. And I was going to have to become a psych major and go seven years undergrad.
And so, I looked up the nine F's that I got. This is all true. And I went to all of these professors and I walked in and said, 'If you give me a D, I get the units and I get to go to Morgan Stanley and you get to give this valuable seat to someone else.' And within about 20 minutes, I got three professors who were basically like, 'You disgust me.' And I was off to Morgan Stanley to build the world's fixed income.
Wow. That's amazing. What do you think I got in college? My grade point average?
I imagine you got every award and were recruited by the best companies and the best newspapers in the world.
No. No, I was rejected by most newspapers. Because there weren't jobs then. Journalism was undergoing a crisis.
You went to Georgetown, no?
To the foreign service school.
Sorry. Carol wanted to be in our security apparatus.
I would. I wanted to be in the military.
Because of her lifestyle.
Just got very quiet in here.
No, I was gay. I wasn't allowed to be in the military. So...
And I always joked that I would be the admiral Trump would be firing right now, out of the military, which would be fantastic in many ways. I'd be wearing these glasses for sure. So, we're going to move on with the show. We're going to talk about it. I actually just got here because I spent a lot of time with three possible Democratic candidates.
So, I interviewed Gina Raimondo, who is the former governor of Rhode Island.
And also the Commerce Secretary who passed the Chips Act and the infrastructure bill. I was with Pete Buttigieg in Michigan, where he lives, Traverse City.
And I was with J.B. Pritzker this morning. So, it was interesting. It was a little tour of the day.
The three have no chance. One's too female and one's too short.
True story, folks. We're highly sexist and looksist in this nation. Absolutely no chance.
Well, we'll see. In any case, they were very impressive.
All right, who's going to be the presidential candidate then for that...
It'll either be Gavin Newsom or TBD. America likes to fall in love with someone they don't know well before Fox destroys them. It'll be a Democrat.
America likes to go back and forth, but tall, handsome, Californian who's got a good story. J.B. Pritzker, outside shot, good dad energy. Ossoff, if he can maintain the whole Camelot Kennedy thing, but Fox will soon turn its sights on him and we'll find out something weird. That guy's too...
He's being called Hotlanta now.
That guy's too perfect. There's got to be some weird stuff in there. That's who I would bet on.
And here is our political pundit going on. Anyway, we're going to talk about things.
I was the guy that had a Mondale poster in my fraternity room. And I supported Dukakis. I just hosted a fundraiser in 2020 for Michael Bennet. So, I am not good at picking candidates.
Let me say, ladies and gentlemen, 2.27 average.
So, I'm going to go on to the topics. This is something you do know a lot more about. Donald Trump's tariffs are making their not-so-triumphant return. He imposed a 50% tariff on Canadian goods like alcohol, milk, and hockey sticks this week, justifying the move with an unused provision of the 1930 Smoot-Hawley Act.
Smoot-Hawley. This is just the beginning. Trump is reportedly set to unleash new tariffs on a dozen countries because it worked so well the last time, given his 10% temporary global tariffs are about to expire. The Supreme Court struck down his liberation day tariffs earlier this year, but the White House keeps attempting various workarounds given the havoc that the Iran war is wreaking on the economy, which is still ongoing, even though it was supposed to be over many times. Is it really now the time to impose tariffs?
Well, look, if you were running above 4% inflation, and it came down, but it looks like it's flipping back up. That doesn't sound like a lot, but that means if you're about to have a kid, we just met someone who's expecting. By the time that kid goes to college, if it maintains a 4%, that means tuition of 40,000 goes to 80,000. So, inflation is how countries basically devolve into chaos. The Fed is there basically to ensure employment growth and to make sure inflation doesn't get out of control. And you can have a lot of unemployment, and people don't riot, but when people are working two jobs, and they can't afford bread, that's when they overthrow the government. So, inflation is really scary. And if you were to reverse engineer that four points, two of the four points can be attributed to the skyrocketing energy prices and tariffs. Tariffs will take approximately a $1,000 toll on every household this year. It'll go to $1,200 on every household average if these tariffs go through. And about 90% of those tariffs are being borne by US consumers. When I was in graduate school, we literally used to look at tariffs as an example of could you believe how stupid we were to do these things?
Right, specifically the Smoot-Hawley Act.
Exactly, and it was considered antiquated and something we would never do again. And then unfortunately, probably our strongest ally, largest undefended border in the world is Canada. 80% of their exports come into the US. And to believe that somehow part of this whole narrative is this grievance culture, that we're victims, that we're being taken advantage of. If there's anyone being taken advantage of, it's our trading partners because if you think about what we sell into Canada, we sell iPhones and JP Morgan and advertising services into Canada. Those are high-margin products. The margin on an iPhone is 40 or 60 points. So, on $100 worth of iPhones that we ship into Canada, we get to hold on to 40 or 60 bucks, call it 50 bucks. Apple trades at a P of 30. So, that's about $1,500 in shareholder value. When they sell $100 worth of timber...
You're talking about 20 or 30 points of gross margin in a company that trades at a multiple of 10. So, for every dollar we ship over, we get about 10 to 20 in shareholder value for every dollar they sell of their stuff and they're getting two or three. So, if there's any dramatic asymmetry in trade that's accruing to one partner, it's the US. If anyone should be putting tariffs on a nation, logically, they would be putting tariffs on us. So, the net effect of tariffs is that the market for our products declines or shrinks, but our products, the things we buy, become more expensive.
Partners or allow other partners in, whether it's Chinese cars or Chinese AI open-source models or whatever they happen to buy, they will have stronger relationships with others. Particularly China.
Oh, absolutely. I think they're going to pay a huge price. And I've said this, it's like that Animal House film when Otter says to the guy who apparently lent his parents' car to the fraternity brothers and they crashed it and he looks at him and said, 'You messed up. You trusted us.' That's how Canada feels about the US right now. They messed up, they trusted us. They thought they had a great ally, they thought they had a great trading partner. They don't. We were willing to basically neuter them economically.
Why do you think Trump is doing this? I mean, he was mad about the wildfires. I think they were sending us beautiful orange skies in honor of him. But why?
I can't imagine a more elegant way to reduce the prosperity of Americans than tariffs. I don't...
I can't understand what he's thinking. Even supposedly his inner circle has said this is a terrible idea.
And yet here we are. You know, I don't...
Another story, Calshi just launched a new midterms hub tracking real-time odds for every House and Senate race across the country. Calshi is calling it a one-stop shop for election forecasting serving the public, campaign, journalists, policymakers, and researchers. By the way, roughly 75% of people going to Calshi are there to check odds, 25% are trading, more than $30 have already been traded in wagers about the control of the House and the Senate, and a spike in the prediction market volume is expected as we get closer to the election. Now, you put a lot of faith in the prediction markets. I find them very game-oriented, meaning they can be easily gamed by not-so-great people. I also have an issue with Polymarket given the kind of things they allow people to bet on. There's an interesting story in the New York Times today about an investment firm that Don Jr. is involved in that somehow has 200% returns, which are unprecedented and is well, probably because of his large brain. I'm guessing not. But talk about these markets because if you were advising a campaign, what would you tell them about them? You put a lot of faith in them, I put less so.
Yeah, so I'm not making a qualitative judgment on whether prediction markets are good or bad. I have real concerns around gaming and gambling and its impact on young men, but polling companies are basically going out of business because if you want to know what someone really thinks, don't ask them what they think, ask them where they're putting their money. It ends up that the wisdom of crowds in terms of what they're actually wagering on, what they're actually voting with their wallet. So, for example, Calshi has never gotten a Fed rate decision wrong. And the data I've seen is they're 78% of the time they're able to predict an outcome in an election, which is greater, or they're 78% more accurate. And some polling firms are basically going out of business because think about the people a polling firm calls that you pick up your phone, you fill out a survey. That's not always very accurate in terms of the actual election. So, these firms, what's interesting about the election side, it'll get more headline news than it is a business. The total election business for Calshi is somewhere between 1 and 2% of the revenue.
Five and a half billion dollars was wagered on the World Cup final. This is a tiny business for them. But it gets a lot of headline press because it's pretty accurate. They're predicting I think about a 70 or 78% likelihood that Democrats take the House, but only 45% that they take the Senate. But I find that that data so far, if I think of a source of truth or accuracy, I go to prediction markets.
Polymarket and Calshi? These are the two big ones.
And apparently Facebook is also considering putting one together.
Yeah, I think of Calshi just because I think it's bigger and has more liquidity and has more volume of people spending their money, if you will.
What's the biggest worry you have of them right now? Because as they become more and more, because they were betting on drug outcomes, they're betting on illnesses, disasters, you know, apparently Trump, the guy who does the teleprompter for Trump was betting on what he would say in the speech because he knew, and is under investigation for that.
Yeah, there's some scenarios where you could see someone finding a market where they say, 'Okay, someone's going to be hurt or killed or whatever.' And they start doing strange acts in order to bet money. But that's no different than fixing like the World Series. And then there's fears around insider trading, but I think ultimately the insider trading will be arbitrated out when people realize that if there's anyone that could have inside information, they shouldn't bet on the other side. My biggest fear is very simple, and that is we have millions of young men who every day are being seduced by screens and algorithms to spend another second on a screen and another second less with their relationships. And we're slowly but surely evolving a new species of asocial, asexual males. They become obese, depressed, anxious, and start blaming women for their romantic problems and immigrants for their economic problems. And somehow we're producing a cohort of really shitty citizens that threaten the nation. That's what I'm worried about, Carol.
All right, other than that, Calshi's fantastic.
All right, let's go on a quick break. We come back, speaking of the midterms, we'll talk about Anthropic's big spend.
Support for the show comes from Coreweave. AI isn't just a new tool, it encompasses so much more. It's spurring a revolution across all industries and reshaping itself to become a big part of our future together. Coreweave is at the center, powering some of the biggest names in AI. As the essential cloud for AI, Coreweave provides an AI platform that combines next-generation infrastructure, intelligent tools, and expert support. It's powering the world's most complex AI workloads faster and more efficiently. From medical research and diagnosis to education, from complex visual effects for movies to breakthroughs in science and technology, if it's AI, Coreweave is uniquely ready to power it with purpose-built tech. The big ideas, the wild visions, and what ifs and why nots. Coreweave is working to build what's never been built before. Coreweave is the essential cloud for AI, ready for anything, ready for AI. To learn more about how Coreweave powers the world's best AI, go to coreweave.com/readyforanything.
Scott, we're back. Anthropic is making a big bet on the midterms, recently doubling its spending to a total of $40 million. The money is going into Public First Action, a PAC pushing for AI regulation. It's a counterweight to Leading Future, a PAC backed by Andreessen Horowitz and OpenAI's Greg Brockman. It's not just, FEC filings show Anthropic and OpenAI employees are emerging as a new donor class, pouring money into races. Anthropic is also writing big checks outside of politics. A federal judge approved the company's $1.5 billion settlement with authors whose work was used to train Anthropic's AI model Claude, their essentially thievery of copyright. The crypto folks had a major impact on the last election. Is this the AI election? We had talked about that. Obviously, Sherrod Brown got his, he may be back, got whacked by the crypto people. I think Elon's now put $90 million into the midterms right now. Is it again going to be, is it all about AI at this point? Well, I've been doing all the talking. What do you think?
I think that's what they're doing. I think they really very much want to control. They're very worried about a couple of things. One is the regulation around the country around AI in states. They're particularly nervous about that, of which are popping up everywhere, the uses of AI. They're worried about the uses, I think the idea of social media being banned, they're sort of getting used to that. And France just did that. I think that they are worried about data centers. And as you say, as a proxy for everything else. I had a long talk with someone from one of these companies today about what to do and maybe change their tone with citizens on data centers because they realize they look like villains. And what can we do to not look like villains and they were asking me my advice and I said well maybe don't be villains. Which they were like we're not villains. I'm like people hate you. Which is what I had told them at a dinner a while back. I said people hate you and they're going to hate you more. So I think them entering even more politics is really problematic for all of us because you know we don't want to get into a sharks versus jets thing between the Anthropic people and the OpenAI, Elon Musk and Andreessen gang essentially. That's what it feels like. Because I don't think it's in the interests of good legislation. I don't think it's the interest of safety. I don't think it's in the interests of bringing AI to all of us. I think it's the interests of protecting what their businesses essentially.
Yeah, the way I read this, so Anthropic is claiming they're putting money into an organization that's actually promoting stricter AI regulation which feels sort of counterintuitive because typically an industry or a PAC representing an industry gives money to try and stave off or delay and obfuscate regulation. I sort of saw it as they recognize how powerful and what a great ROI it is to invest in Washington. So this is sort of their ticket to the conference where they're going to network and establish relationships should they need those relationships.
I don't think any of them have an interest in any actual legislation. None at all.
I think this, Mark Zuckerberg did this. Please regulate us. Please regulate us and then did everything possible to stop it. Even Apple does it. We talk about age verification and other things and they block it everywhere you go and I don't think, I think these people like no regulation and I think this money is incredibly dangerous by this one group of people. No matter what side they're on. I mean I don't like either side pretty much.
Yeah, look it's all roads lead to the same place unless we overturn Citizens United and we get some semblance of... I mean I think that money is going to decide this election for the most part or have a big influence on it and companies running unfettered... it's just anyway, I'm a broken record.
Well, speaking of that, they may not have unfettered money. Executives at OpenAI and Anthropic are warning about the rise of cheap AI from China, which we've talked about a lot, saying it will lead to security risks and a dystopian future. The Trump administration says it will look into whether AI has been distilled from American models, of course they have, saying it doesn't support IP theft, which is rich from these people. In an attempt to gain ground over China, the US plans to overhaul federal funding to support individual scientists and the use of AI rather than universities, which is individual... This is a real problem. They're starting to give money to individual star scientists. Meanwhile, on a security front, OpenAI models went rogue and hacked a startup, Hugging Face, during a security test. They were bragging about it a little bit. It was unprecedented that we managed to attack another company. What happened was the AI jumped out of the sandbox it was in and went around all of OpenAI's security efforts and went and attacked a company on its own. So to me, I'm not sure these executives are worried about the future or just worried about competition. How do you look at this? You were the first to mention this to me, this threat from China.
Well, in January of 2025, which was not long ago, about 10% of token usage was coming from Chinese open weight models. As of today, it looks like it's 58%. So, what you effectively are saying is this bifurcation in the market where American models are turning into German automobile manufacturers. They're high-end, they're more expensive, and even though you have 58% token usage from the Chinese models on a revenue side, the American models, the Frontier models, are much bigger businesses because DeepSeek charges about 1/35 of the price for token usage. So, I think this is just turning into the automobile market where you're going to have a high-end BMW or Mercedes, and then you're going to have Toyota, Hyundai, Honda. So, they'll produce more cars, they'll produce more AI, it'll be lower margin, but the market's bifurcating. And there's still a market for the Frontier models. So, there's certain applications where people want the best, latest, greatest model with more security, more testing, someone you can sue, someone you can call with customer service complaints. They'll probably do a better job of hiring some of the people in this room to figure out how to monetize it through advertising. But you now have, essentially, I would argue that AI, on a volume level, that China has already won. And it's not a race to see who has the smartest model. It's a race to see who can put the most AI in the most people's hands. And right now, that's China.
And the backlash to data centers will be part of that. They'll be able to do more compute there. They'll be able to get it to more people. And the backlash to data centers is these companies' own fault for the way they behaved. Even if some of them, you know, I ran into the mayor of Lansing, Michigan who had a great deal from one of these companies, and the citizens just didn't want it anyway because they hate them. Which I keep telling them. I don't think they like me saying that, but they do. People hate them. All right, let's go on a quick break. When we come back, we'll talk about France banning social media for kids under 15.
Support for the show comes from Framer. If your team wants a website that looks and feels handcrafted, but is still fast to ship, Framer is built for that. You design on a visual canvas with responsive layouts, hosting, and a CMS built in so the work is production ready from day one. Agents work alongside you to draft pages and polish sections, then you review and publish what goes live. Framer is the pro site builder for creators, teams, and businesses that want a professional site and care enough to get every detail right. Agents solve the gap between AI-generated ideas and production-ready website work, and the...
France has banned social media for children under 15. It's the first country in the EU to pass a blanket ban, and the bill also bans the use of mobile phones in high schools. Last year, Australia banned children under 16 from having social media accounts, and the ban is failing to keep teens off the platforms.
This is a worldwide trend, and it will be coming here at some point, and relatively soon. And I suspect the social media companies, some of them, are going to get on board with it.
